Health Policy Report

After a week of failed negotiations and messaging exercises, the White House and lawmakers have yet to make meaningful progress towards a deal to end the partial government shutdown. In a move aimed at increasing pressure on GOP lawmakers, the House held votes on individual government funding bills last week. The lower chamber passed the Financial Services and General Government (FSGG) appropriations bill, as well as bills that would reopen the Agriculture Department and the Food and Drug Administration (FDA); the Interior Department and the Environmental Protection Agency (EPA); and the departments of Transportation and Housing and Urban Development. While the funding bills did attract marginal House GOP support, Senate Majority Leader Mitch McConnell (R-KY) does not plan on allowing a vote in the upper chamber absent support from President Trump — who reiterated his shutdown stance in a primetime address last week.

Meanwhile, Democratic senators are blocking consideration of all unrelated legislation in that body in protest over the partial government shutdown. Last Tuesday, Sens. Ben Cardin (D-MD), Chris Van Hollen (D-MD), Tim Kaine (D-VA), and Mark Warner (D-VA) orchestrated the effort to vote down a motion to proceed on a Middle East policy bill (S.1) prior to President Trump’s border security address. Senate Democrats have signaled they are prepared to block future legislative items so long as parts of the federal government remain shuttered.

The Week Ahead

Lawmakers will return to Washington today amidst what has become the longest government shutdown in U.S. history. Facing increasing pressure to deliver a solution, the Trump administration is contemplating a plan to declare a national emergency to bypass Congress and fund the president’s border wall priority. The proposed plan would reportedly tap into unused funds in the Army Corps of Engineers budget — a move that would certainly face opposition in Congress and the courts — but could create a path to end the 24-day partial government shutdown. As of this writing, however, President Trump seems intent on pursuing his border wall through the Congress, despite his weekend rejection of a compromise floated by Senate Republicans, including his erstwhile ally, Lindsey Graham (R-SC).

On the floor, House lawmakers are set to consider a $12 billion supplemental spending bill (H.R. 268) for relief and recovery aid to states impacted by recent hurricanes, typhoons, wildfires & other natural disasters The lower chamber will also consider a series of suspension bills, including a bill (H.R. 430) that would extend funding for the Temporary Assistance for Needy Families (TANF) program until the end of June. In the upper chamber, Senators are likely to remain stuck on consideration of the Middle East policy bill as Senate Democrats continue to block consideration of legislation until the government is opened.

Democrats Push Forward with Drug Pricing Agenda

On Thursday, House Oversight Chairman Elijah Cummings (D-MD) announced a January 29 hearing on prescription drug price increases, placing the first drug pricing hearing of the year on the calendar. The announcement came just hours after Cummings joined Sen. Bernie Sanders (I-VT) in releasing a trio of new bills designed to curb prescription drug costs. While witnesses for the hearing have yet to be identified, it’s likely that either drug industry executives or Health and Human Services (HHS) officials will be called to testify. Chairman Cummings has previously indicated that he will call drug industry executives before Congress to testify about high drug costs, and separately, is reportedly set to meet with HHS Sec. Alex Azar to discuss the issue.

Chairman Cummings and Sen. Sanders join a frenzy of recent bill introductions with their new legislation, with at least three other prospective Democratic presidential candidates having introduced drug pricing bills already this Congress. The first of the Cummings/Sanders bills, the Prescription Drug Price Relief Act, would build upon the Trump administration’s proposal to establish an international pricing index model in Medicare for part of the country, expanding the policy for the entire country based on five reference countries (Canada, the United Kingdom, France, Germany, and Japan). Next, the Medicare Drug Price Negotiation Act would allow the Secretary of HHS negotiate drug prices in Medicare Part D. Finally, the Affordable and Safe Prescription Drug Importation Act would direct the Secretary of HHS to issue regulations allowing wholesalers, licensed U.S. pharmacies, and individuals to import qualifying prescription drugs manufactured at FDA-inspected facilities from licensed Canadian sellers.

Meanwhile, a host of other Democratic leaders have recently introduced drug pricing legislation, including several rumored to be eyeing 2020 presidential runs. While these proposals could be injected into the national policy dialogue as the presidential primary season takes center stage, each of the bills face dim legislative prospects in the 116th Congress under the GOP-controlled Senate.

House Passes Medicaid Extenders Bill

The House passed a bill extending popular Medicaid programs and penalizing states for failing to implement asset verification programs on Tuesday. The Medicaid Extenders Act of 2019, introduced by Rep. Frank Pallone (D-NJ), is a significantly stripped-down version of the IMPROVE Act, which the House passed before the end of the 115th Congress in December. The IMPROVE Act received no action in the Senate. Rep. Pallone’s bill extends the Money Follows the Person (MFP) demonstration through the end of fiscal year (FY) 2021 and offers a shorter-term extension for a program protecting the spouses of recipients of home and community-based services through Medicaid from impoverishment. The spousal impoverishment program ended on December 31, 2018, and Rep. Pallone’s bill would extend it through the end of March 2019 to give Congress time to reach a longer-term deal. However, a timeline for Senate passage is unclear. With the spousal impoverishment program having expired at the end of 2018, lawmakers could feel pressure to act quickly.

House Committee on Ways & Means Chairman Richard Neal (D-MA) and Ranking Member Kevin Brady (R-TX) expressed concern at what they characterized as a lack of transparency and public input in the Center for Medicare and Medicaid Innovation’s (CMMI) demonstration models. In a letter sent Wednesday to Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma, Chairman Neal and Ranking Member Brady warned that “significant policy changes made unilaterally by the executive branch without sufficient transparency” could harm beneficiaries and the healthcare system. The lawmakers specifically criticized what they see as CMMI’s infrequent use of the formal rulemaking process, instead subjecting only mandatory models to the process and developing non-mandatory models without the formal, transparent process required of most agency-level policy changes.

In their letter, Chairman Neal and Ranking Member Brady requested that CMS provide a detailed list of the models under active consideration by the agency, saying that stakeholders have alerted them to new models under development. They also asked the agency to describe any activities that CMMI plans to “promote transparency and engage Congress, stakeholders, Medicare beneficiaries, and the public” before finalizing forthcoming models. Chairman Neal and Ranking Member Brady expect CMS to follow Congress’s intent when it created CMMI, writing that they expect it to test and promote innovative delivery system models but not to “bypass Congress and the public to rewrite Medicare law.”

The Food and Drug Administration (FDA) is set to launch a new office in charge of improving and integrating the drug development and review process. During a fireside chat with at the J.P. Morgan Healthcare Conference Tuesday, FDA Commissioner Scott Gottlieb announced the creation of the Office of Drug Evaluation Science (ODES), which will work to improve the review of new medicines by incorporating personalized medicine, patient reporting, and digital data into the drug development and review through a standardized approach. “The whole reason the cost of drug development is high is that the science of prediction is costly and uncertain,” said Commissioner Gottlieb, adding that the time has come to make the science of drug development a “more formal scientific discipline” within the new drug approval process. He stressed that the new 52-person office is not just an organizational shift, but part of a larger plan to modernize the FDA review process and foster innovation.

As part of the wide-ranging interview with J.P. Morgan senior healthcare analysts Cory Kasimov and Chris Schott, Commissioner Gottlieb explained that the launch of ODES will be similar in process to the creation of the Office of Simulation and Modeling (OSM) in 2003. Although OSM’s tools were little used when the office was formed, today more than 90 percent of all FDA applications include some aspect of simulation or modeling. Commissioner Gottlieb noted that the FDA wants to recognize the new tools growing in importance to the review process as well as create more consistency and rigor around the science and safety of new drugs. He envisions “a world where data will be uploaded from drug company studies into the cloud, and instead of looking at the charts and tables companies create themselves, the FDA will use its own standardized methods on the raw data.” ODES will also work to standardize information form patient reports and create more structured approaches to the evaluation of biomarkers.

The new group will be a part of the Office of New Drugs, and it will have its own director to oversee its three divisions — the Division of Clinical Outcomes Assessments, the Division of Biomedical Informatics and Safety Analytics, and the Division of Research and Biomarker Development. Commissioner Gottlieb explained that the new office is going through the final stages of review, and it is expected to launch in the first half of this year.

House Republicans Reintroduce Bill Protecting Preexisting Conditions

Five House Republicans, led by Rep. Dave Joyce (R-OH), reintroduced a bill last week to preserve preexisting conditions protections in light of a federal district judge’s ruling to repeal the Affordable Care Act. The Continuing Coverage for Preexisting Conditions Act was previously introduced by Rep. Joyce in the 115th Congress, and would ensure ACA provisions that bar discrimination due to preexisting conditions remain in effect if the individual mandate is found unconstitutional without a penalty. Reps. John Katko (R-NY), Mike Turner (R-OH), Anthony Gonzales (R-OH), and Jaime Herrera Beutler (R-WA) Joined Rep. Joyce in cosponsoring the bill. The 5th U.S. Circuit Court of Appeals delayed the ACA case on Friday, after a request from the Department of Justice to issue a stay amid the confusion of the government shutdown.